Why did the US stock market experience its worst week since 2008 prior to the rebound?

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The US Stock Market's Worst Week Since 2008 Was Driven by Coronavirus Fears and Recession Concerns

The US stock market endured its most significant downturn since the 2008 financial crisis in the week preceding a notable rebound, primarily due to widespread apprehension surrounding the coronavirus outbreak and its potential to trigger a recession. These fears led to a sharp sell-off across major indices, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all experiencing substantial declines.
Impact of Coronavirus Fears on Market Activity

Fears about the coronavirus were the principal catalyst for the market's steep decline. Investors worried about the epidemic's potential to disrupt global supply chains and reduce consumer spending, which could consequently lead to an economic downturn. This uncertainty permeated the market, causing a broad retreat from riskier assets as investors sought safer havens. The Institute for Supply Management reported that domestic manufacturing activity saw only marginal expansion in the preceding month, directly attributing this to supply chain disruptions stemming from the virus outbreak.
Investor Sentiment and Market Correction

The sell-off pushed the S&P 500 into correction territory, defined as a decline of 10 per cent or more from its recent peak. Specifically, the S&P 500 remained 8.7 per cent below its record high close on February 19. Many market participants considered the index to be in a correction until it managed to reclaim its previous high. This sentiment was reflected in trading activity, where advancers outnumbered decliners on both the NYSE and Nasdaq, but the Nasdaq Composite still recorded a significant number of new 52-week lows (149) compared to new highs (27).
Central Bank Responses and Investor Reactions

In response to the escalating market turmoil, central banks began to signal their intent to stabilize financial markets. The Bank of Japan announced its intention to take necessary steps, following a similar indication from Fed Chair Jerome Powell. This coordinated approach by central banks aimed to insulate credit markets from economic uncertainty and alleviate investor concerns. Despite these efforts, some market analysts noted that monetary policy alone might not fully resolve the issue, as the problem encompassed both supply and demand factors exacerbated by public health measures like quarantines.

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Why did the US stock market experience its worst week since 2008 prior to the rebound?

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